HB-4990, As Passed House, May 10, 2016HB-4990, As Passed Senate, May 3, 2016

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4990

     A bill to amend 1909 PA 279, entitled

"The home rule city act,"

by amending section 5f (MCL 117.5f), as amended by 2002 PA 201.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 5f. (1) The legislative body of a city may provide by

resolution for the acquisition or financing of energy conservation

improvements to be made to city facilities or infrastructure and

may pay for the improvements or the financing or refunding of the

improvements from the general fund of the city or from the savings

that result from the energy conservation improvements. Energy

conservation improvements may include, but are not limited to,

heating, ventilating, or air-conditioning system improvements,

fenestration improvements, roof improvements, the installation of

any insulation, the installation or repair of heating, ventilating,

or air conditioning air-conditioning controls, and entrance or exit

way closures, information technology improvements associated with

an energy conservation improvement, and municipal utility

improvements associated with an energy conservation improvement.

     (2) The legislative body of a city may acquire, finance, or

refund 1 or more of the energy conservation improvements described

in subsection (1) by installment contract, which may include a

lease-purchase agreement described in subsection (5), or may borrow

money and issue notes for the purpose of securing funds for the

improvements or may enter into contracts in which the cost of the

energy conservation improvements is paid from a portion of the

savings that result from the energy conservation improvements.

These contractual agreements may provide that the cost of the

energy conservation improvements are paid only if the energy

savings are sufficient to cover their cost. An installment

contract, a lease-purchase agreement described in subsection (5),

or notes issued pursuant to this subsection shall extend for a

period of time not to exceed 10 20 years from the date of the final

completion of the energy conservation improvements or the useful

life of the aggregate energy conservation improvements, whichever

is less. Notes issued pursuant to this subsection shall be full

faith and credit, tax limited obligations of the city, payable from

tax levies and the general fund as pledged by the legislative body

of the city. The notes shall be subject to the revised municipal

finance act, 2001 PA 34, MCL 141.2101 to 141.2821. A lease-purchase

agreement issued pursuant to this subsection shall not be subject

to the revised municipal finance act, 2001 PA 34, MCL 141.2101 to

141.2821, and shall not be a municipal security or a debt as those

terms are defined in that act. This subsection does not limit in

any manner the borrowing or bonding authority of a city as provided

by law.

     (3) If Prior to entering into a contract for energy

conservation improvements are made as provided in under this

section, the legislative body of a city shall determine the

following information and, within 60 days of the completion of the

improvements, shall report the following information to the

Michigan public service commission: within 60 days of the

completion of the improvements:

     (a) Name of each facility to which an improvement is made and

a description of the energy conservation improvement.

     (b) Actual energy consumption during the 12-month period

before completion commencement of the improvement.

     (c) Project costs and expenditures, including the total of all

lease payments over the duration of the lease-purchase agreement.

     (d) Estimated annual energy savings, including projected

savings over the duration of the installment contract.

     (4) If energy conservation improvements are made as provided

in this section, the legislative body of a city shall report to the

Michigan public service commission, by July 1 of each of the 5

years after the improvements are completed, only the actual annual

energy consumption of each facility to which improvements are made.

The forms for the reports required by this section shall be

furnished by the Michigan public service commission.

     (5) An installment contract described in this section may

include a lease-purchase agreement, which may be a multiyear

contractual obligation that provides for automatic renewal unless

positive action is taken by the legislative body to terminate that

contract. Payments under a lease-purchase agreement shall be a

current operating expense subject to annual appropriations of funds

by the legislative body and shall obligate the legislative body

only for those sums payable during the fiscal year of contract

execution or any renewal year thereafter. The legislative body may

make payments under a lease-purchase agreement from any legally

available funds or from a combination of energy or operational

savings, capital contributions, future replacement costs avoided,

or billable revenue enhancements that result from energy

conservation improvements, provided that the legislative body has

determined that those funds are sufficient to cover, in aggregate

over the full term of the contractual agreement, the cost of the

energy conservation improvements. The lease-purchase agreement will

terminate immediately and absolutely and without further obligation

on the part of the legislative body at the close of the fiscal year

in which it was executed or renewed or at such time as appropriated

and otherwise unobligated funds are no longer available to satisfy

the obligations of the legislative body under the lease-purchase

agreement. During the term of the lease-purchase agreement, the

legislative body shall be the vested owner of the energy

conservation improvements and may grant a security interest in the

energy conservation improvements to the provider of the lease-

purchase agreement. Upon the termination of the lease-purchase

agreement and the satisfaction of the obligations of the

legislative body, the provider of the lease-purchase agreement

shall release its security interest in the energy conservation

improvements.

     Enacting section 1. This amendatory act takes effect 90 days

after the date it is enacted into law.